Orlando is cheapest place to open business, report says

View Orlando: Cheapest place to open a business in a larger map (Orlando Sentinel )

January 19, 2011|By Jim Stratton, Orlando Sentinel

Gov. Rick Scott and top legislative leaders spent much of last year talking about the need to make Florida more pro-business, but the state dominates a new report listing the 20 cities with the lowest operating costs and best business climate.

In a ranking of the 20 cheapest cities to set up shop, Florida appears five times, with Orlando claiming the top spot. Jacksonville finished third, and Broward County ranked 20th. Tampa Bay was seventh, and Palm Beach County came in at 16th.

No other state placed more than one city on the list of top 20.

"Florida is one of the most pro-business states in the nation," said John Boyd Jr., a principal with BizCosts.com, the New Jersey-based company that did the analysis earlier this month. "And it has been for some time."

BizCosts compared the annual costs of operating a typical corporate headquarters in 55 cities across the U.S., weighing factors such as labor costs, tax burden, utility costs and travel costs. For its model, it calculated those expenses for a 75,000-square-foot facility employing 300 people.

It found that Orlando had the lowest cost of the 55 cities studied, totaling about $19.9 million a year. Jacksonville was slightly more — $20.1 million a year – and Broward County (home to Fort Lauderdale) was $21.6 million. New York City had the highest cost, at $28.5 million a year.

"The labor costs tend to dominate the equation," Boyd said. "And we see Florida and Orlando as enormously competitive."

The report comes a month after the Small Business & Entrepreneurship Council placed Florida sixth overall — and second among big states — in a ranking of the best places to run a small company.

Those findings run counter to political theme that has emerged in the past year.

With the state facing record unemployment levels — a 12 percent jobless rate, with 1.1 million people out of work — state political leaders built campaigns around the need to bring more jobs to Florida. Central to that was the implication that the state had not done enough to accommodate business or, in some cases, fostered an adversarial relationship with the business community.

Florida House Speaker Dean Cannon and Senate President Mike Haridopolos, both Republicans from Central Florida, turned to that theme repeatedly, holding a jobs summit early last year and following up with an op-ed piece printed in the Orlando Sentinel.

It said Florida should replace its "bureaucratic model of government with a collaborative one" and that "layers of government duplicating paperwork" hinder business development. And it said the state must work with financial institutions and entrepreneurs to "make Florida a capital-friendly environment."

On Wednesday, Haridopolos told a radio interviewer: "People in the business community need to know that Florida is on their side."

Scott, also a Republican, used virtually the same language during his bid to become the state's 45th governor. He cast himself as a successful businessman ready to apply common-sense solutions to Florida's economic problems.

The message resonated with voters, but it ignored the fact that Republicans have controlled the Legislature and Governor's Office for more than a decade. If creating a pro-business environment were as simple as elected leaders suggest, the GOP could have pushed those measures through.

And that's what it did, said state Sen. Mike Fasano, R-New Port Richey.

Fasano doesn't accept the premise that Florida has become a state that scares off entrepreneurs. Though every bureaucracy gets flabby, he said, many regulations are passed for legitimate reasons.

"Look, there was not a governor friendlier to business than Gov. Jeb Bush," Fasano said, "and Gov. [Charlie] Crist was pro-business, too. So when I hear the new governor and others talking about eliminating regulations, I'm not sure what regulations they're talking about."

Scott, who has pledged to eliminate the corporate sales tax, has provided relatively few details, saying only that businesses tell him the state is too regulated and the development process too arcane.

"It's not one thing," he told editors and reporters in Tallahassee on Wednesday for their annual legislative planning session. "It was a tedious process. It took way too long to get a decision. It's a very slow process. No one knows the process. It's a lot of paperwork."

Cannon's office, meanwhile, said in an e-mail that the House speaker does think Florida is "very business-friendly," his comments from earlier this year notwithstanding. But, his spokeswoman wrote, "there is always room for improvement."